Building/Financing Your Dream Home in Lincoln, NE – 2019
In the 19th century Anglican Minister Frederick William Robertson’s Sermons Preached at Brighton, he wrote about home. In more or less words, he noted that we as people do not need an elaborate explanation to understand the idea of “home.” He goes as far to say that “Home is the place where we tear off that mask of guarded suspicious coldness which the world forces us to wear in self-defense…a happy home is the single spot of rest which a man has upon this earth…” So, if a home is such a place as Robertson describes it, there is no wonder why we all have a dream of what we want in our home—not just decor items to make it look how we want it to look, but also a strong foundation, reliable structure, dependable fixtures, etc. Home is where we should feel comfortable and safe.
Some new couples go for starter homes or the rent-to-own route, while others choose apartment living to save for the future, but for growing families, the dream of owning a home is closely connected to their dream of having a secure place where children have the space to live and grow. Older individuals and empty nesters may choose a home based on where they want to spend their retirement years. When choosing between an older home and building a new house, there are several factors which can affect your finances and the efficiency and safety of your new home.
First, consider the financial side of building a new home. Is it any different from purchasing an existing home? For answers, we reached out to Matt Gutschenritter, mortgage lending officer for Cornhusker Bank, who is experienced with both the process of financing the purchase of a new home and the options available. Describing the overall process, Matt said that obtaining financing to build a new home is not much different than obtaining financing for an existing home.
“Basically, at the end of the construction, all parties involved, including the borrower, the builder, the realtors, the bank, etc., will want to have the peace of mind that new owners have their long-term financing in place and ready to go,” Matt explained. “The process starts with getting pre-approved for their long-term financing. Once we have that in place, it’s a matter of having the discussion with the builder to determine who will be taking out the financing for the new construction and putting together a contract. If the builder takes out the construction loan, then we work with the buyer in getting them approved for a purchase transaction once the house is completed. If the buyer/borrower takes out the construction loan, we work with them during the construction process and get them prepared to have their long-term financing set up as soon as their house is built. Upon completion of the construction, we would set up their long term financing and pay off their construction loan.”
For a buyer, affording the construction process on a new home may limit their options, so knowing some fundamental distinctions between old and new homes is invaluable. “There are benefits to both building a new home as well as buying an established one,” Matt continued. “The most obvious advantage to building is that you are assured to get the features and floor plan that you want. However, when it comes to building, you may not be able to build in a neighborhood that is close to the area of town that you want to be in based on location near schools, work, shopping, friends and family, etc.”
For costs, Matt points out that despite the initial costs of new construction, owners of new homes can save on repairs and insurance. “As far as costs go, it can be more expensive to build than to buy, but not always,” he said. “The initial costs to get into a new construction may be higher, but chances are there should be minimal expenses when it comes to repairs, decorating, and general upkeep. With an existing home, there will likely be the need for replacing the roof, windows, utilities, etc. With a newly built home, everything is built to current code, and therefore should be less expensive to heat and cool. Most people do not realize that Homeowners Insurance is typically less expensive on a newly built home as well.”
While mortgage rates continue to favor buyers, most experts expect rates to rise in the future. “Mortgage rates continue to be at or near record lows,” Matt informed us. “It seems most of the talk around the industry is that the Fed may soon be increasing the Federal Prime Interest rate, but Federal Prime Interest rate is not directly linked to mortgage rates, increases in both usually coincide.”
A common mistake Matt believes buyers make is focusing so much on the initial costs, that they forget to secure a good deal for their long-term payments. “Do not get overburdened with the construction loan itself,” Matt advises. “The bigger financial impact will come with the long term financing. Look for a lender that has your best interests at hand for the long term.”
To help ease clients concerned about future interest rate increases, Matt encourages buyers to ask about interest rate locks, which go into effect prior to a new house’s completion. “As far as resources go, usually we take out an interest rate ‘lock’ around 60 days prior to the completion of a newly constructed home,” Matt told us. “However, with the threat of rates going higher in the near future, if someone is losing sleep over these interest rates, at Cornhusker Bank we offer a six-month ‘lock’ program to help eliminate this issue.”
Matt encourages potential buyers to visit Cornhusker Bank in person or online for information on mortgage loan applications or pre-qualifications. “The online application has worked well for many customers and their busy schedules,” assured Matt. “It is streamlined and therefore eliminates a lot of the questions, based on the answers given, that the regular paper application presents.”
While you are in the early planning stages of attaining your dream home, Tyler Rains, the residential construction officer for Union Bank & Trust, believes it is vital to explore your options thoroughly and communicate with your builders.
“Take your time and meet with several builders in your price point. Be firm with what you want from your new home and always sign a contract with your builder. It’s important to also plan for the unexpected,” Tyler recommended. “Over the past 12 months, we have started to see mortgage interest rates increase slightly. As your new construction project approaches completion, it is important to have good communication with your builder, so a firm completion date can be established. By having a firm date set, you can make sure your refinance to the secondary market (if necessary) is in place as close to completion as possible to avoid potential increased interest rate.”
It’s also a good idea to budget for changes and additions ahead of time. “Address change orders with your construction project as they happen…and keep on top of them,” advised Tyler. “In some cases, the change orders are small and can be offset by making small changes elsewhere in the project, but even small change orders can add up. A simple change to the project of $1,000 alone is a nominal amount when considering the overall cost of most projects. However, if 10 change orders are made, that could be a $10,000 change to the overall budget. My suggestion is, if possible, take care of all change orders with personal funds so you know you can afford the home when the project is complete.”
Tyler believes that building a home offers several key benefits and challenges to buyers: “In today’s housing market, there are several benefits to building a new home rather than purchasing an existing one. When you build a home, you can choose the location and builder as well as customize the home 100% from the ground up if that’s your desire. One of the major challenges of building a home is the personal time commitment—from visiting the site regularly, to meeting with your builder, to picking out paint colors, to choosing the floor coverings to deciding on the finishing touches—the final product is rewarding enough for most people, but the time commitment can be too much for some individuals.”
When exploring your options for construction companies for building your dream home, consider their portfolio and save samples of their work for later. During the design process, these can be useful for communicating your vision. As one of the co-founders of Tru-Built Construction, Bo Jones says that many people do not anticipate the time needed to develop, design, and plan a project because they assume that the actual construction is the longest step. “I always advise to start planning early. Most people are surprised that the planning stage can actually take longer than the construction itself. During this phase, you’ll have to consider your site, your budget, the home’s design, and legal permits,” Bo said.
The benefits for building a new home include being able to customize the home the way you want, have brand new carpet/flooring, appliances, etc., and you will be the original owners of the home. This is right for many buyers as they simply want to tailor the home to their unique tastes and have something that is brand new. Despite these advantages, because of the costs of building a new home, buyers should take a close look at the housing market. Sometimes, an existing home might offer exactly what someone is looking for.
“Deciding whether to build or buy existing is a family decision and should be evaluated carefully,” said Bo. “Buyers have a difficult time finding what they are looking for on the existing market which is why they end up building, but sometimes patience is important to see if you can find the right property without having to build. Consider having a timeline on when you need to move. This will help determine if you should buy existing versus building new.”
Some good news for new home builders and buyers alike is the improvements in plumbing, heating and air conditioning, and lighting systems, meaning that some costs of a new home can be reduced in the long run thanks to more efficient systems.
As the owner of All Pro Heating and Air Conditioning, Constantine Syniy noted that the latest HVAC technology doesn’t just save money, it protects the health of family or guests and ensures comfort. “One aspect of your home to pay attention to is your air quality, especially if you are a pet owner,” said Constantine. “Homeowners who overlook their air quality are risking both comfort and their health. While most manufacturers recommend changing air filters once or twice a year at a minimum, homes with more occupants will need to replace their air filters more frequently, approximately once every other month.”
Because pets naturally shed their coats or leave dandruff, he suggests changing your air filter once a month. “You should take your air quality very seriously. Your house circulates air, so the better your filtration, the better you are protecting yourself from breathing in debris without losing the temperature you want,” advised Constantine. “Make sure you are talking to a trusted contractor about getting these systems properly installed into your home.”
Terry Neemann, co-owner of Neemann & Sons, agrees that hiring a trustworthy contractor is critical. “Hire local, reputable contractors. I recommend asking friends and family for referrals,” Terry told us. “It’s also a good idea to research the products a contractor prefers to use. Be sure to hire a contractor that installs quality products and does not cut corners to do a less quality job.
In Terry’s opinion, the best advice he has for people considering selling their home and building a dream home is to take the best care possible of their current home. He explained that this will increase your buying power later. “Updating the exterior of your home will always help the resell value of your home,” said Terry. “Time to replace the roof on your home? You can trust our team to handle the roofing design, installation, and repairs, using only quality products that fit your budget. At Neemann & Sons, we have 30+ years of experience in incredible transformations for homeowners all across Nebraska. We offer fully tailored solutions so you can dream the perfect home while we provide the quality materials and talent to construct it.”
With that in mind, we talked to co-owners of Luxury Landscape, Ken Svoboda and Jackie Lienemann about investing in the long term quality, beauty, and resale value of your dream home through landscaping. When designing a front or back yard, a landscaper’s job is to think of the land in a similar fashion to how an architect thinks of a building. As recommend, including a landscaping budget for any new housing project.
“It is so much fun and exciting when planning the final details on the inside of the home, but many don’t focus on the outside when the home is finished,” Jackie addressed. “A common mistake families make while landscaping is not taking into account the life-cycle for trees to grow properly. If a customer is planning on building a new home, we always recommend they start with
planting trees as a landscape priority. Since trees take the longest time to grow, getting them in the ground before any other landscaping is done allows them to grow and mature as they work on other landscaping projects.”
Generally, new homes offer the most opportunities to customize the surrounding land. “When purchasing an established home, most of the time it has an established landscape, which can be changed to meet the customer’s wants and needs, if it doesn’t already. But when building a new home, the landscape is a blank canvas, allowing us to work closely with the customer in designing their own private outdoor oasis!” exclaimed Ken. “That means getting some beautiful outdoor furniture as well. We actually just launched a new online store, so you can check out all the outdoor products we have in our collection that will make your front and back yard look the part.”
Spring is the time of the year when most landscaping work can be done. As Doug Miller, a designer for Eagle Nursery explained, landscape work often involves correcting damage done during the winter season and creating an aesthetic design for the space. “Landscape work comes during spring. If you are looking to do a landscape design or re-landscape, that is when we would send someone out to see if we could revitalize it. We would sit down with a complete colored design with you,” Doug said. “I deal with the design end of it and the sales. If a customer comes in and wants a new design put together, I meet with the customer to find out what their needs are, what their design preferences are. There are a lot of options he can work with to create an aesthetic design for customers based on their priorities. For making a space beautiful, it’s a combination of hardscapes and softscapes. If you are looking for a deck or pergola, we work in those elements. Many people want retaining walls, pave or patios, fire pits. The design stage is about working in all the right materials and making the colors work together.”
For your outdoor area, there are several options you might consider to make your yard a welcoming space for guests or children. For example, if you are considering an aesthetic space or a walkway, we’d recommend checking out Outdoor Solutions for some ideas. Founded by brothers John and Bob Hendricks, they offer a wide retail selection of landscape materials, including cobblestone, walls, lighting, fire pits and accessories, flagstone, mulch, soil, and pond supplies. You can add an earthy touch to your yard with a selection from their pottery and other outdoor art and decorative elements.
If you like the aesthetic of brick, not only has Yankee Hill Brick been historically providing brick for nearly 140 years, they also offer a selection of time-tested brick styles from different times and places throughout history. Browse their online gallery of products to find colors and styles that complement your landscape plan.
As a specialist focusing on decks and porches, Decks Unlimited can both build new decks and offer you the materials to do your own personal work. Here are materials for deck and porches they offer, and some strengths of each:
- Composite materials are an alternative to traditional hardwood, and are resistant to rotting, cracking, mold and mildew, and termites. Decks Unlimited recommend Timbertech.
- Aluminum is a lightweight and durable material suitable for railing. Decks Unlimited offers 10 styles in 12 different colors, including the exclusive Westbury color—Mocha.
- YellaWood is a pressure treated pine, featuring a lighter color. The treatment process protects against rot, fungal decay, and termites.
- Lighting options not only add style and beauty to a deck, they can be an important safety feature to help you see as you enter your home at night.
- Cedar: a sturdy, traditional option for a natural, wood deck.
In order to keep a landscape healthy, irrigation systems are used to keep yards watered throughout the spring and summer. Depending on the age of the home, older systems may limit the options for irrigation. In addition to offering services to inspect, install, and program sprinkler systems, Jeremy Hunt, owner of Hunt Irrigation, said he has also seen innovations which can save homeowners from wasting hundreds of dollars on water each year—now that is a dream come true!
“In the last few years, sprinkler manufacturers have introduced pressure regulated rotors (oscillating) heads,” Jeremy informed us. “The optimum pressure for a rotor is 45psi. Pressure regulating rotors offer the same savings as their counterpart—the fixed spray. By upgrading you can expect to see a ROI in just two years of operation.”
“Controllers have seen some very impressive changes in the last five years as well,” Jeremy continued. “Controllers of the past were a simple on-off switch for your sprinkler system. The controllers of today are designed to allow homeowners to increase the efficiency and effectiveness of their irrigation methods by always providing just the right amount of water. So if an unexpected rainstorm moves in and begins to saturate your lawn, you won’t have to worry about your sprinklers turning on and adding to the deluge. On the other hand, if you’re hit by a dry spell, the system will know to add additional water and provide enough water to keep everything healthy. Some of these controllers are web-based and allow you to operate them with an app through your phone from anywhere. A lot has changed since the first automatic irrigation systems were introduced to the world, so why keep using inefficient and antiquated systems in the home of your dreams? ”
Some systems will save a homeowner significantly over time, but one value that is harder to measure is security and safety. If a system that uses energy or water efficiently is an investment for financial security, having secure, reliable doors in an investment for your feeling of personal security in your own home.
Security and style seem to be the two most common questions people have asked Jacob Hiatt of Raynor Doors of Nebraska. In addition to deadbolts which only open for the garage door opener or passcode, Hiatt said that homeowners do not have to choose between style and security. “As far as particular options for theft or weather, there are so many different options available. The great thing about getting a new door is you have lots of options to get a door that’s what you think it should look like without compromising security. You don’t have to sacrifice strength or integrity of the door just because you want a particular look. A higher insulated door is going to be a little tougher to break into, and in hot and cold weather it’s going to keep that out.”
To save on energy bills throughout the year, and simply be more comfortable in general, Jacob personally recommends an insulated garage door. “The more insulation you have in your door, the better insulated and quieter you house will be,” he explained. “There are security features for people who want a glass panel at the top. We also have a satin glass, which will let light in, but will not allow anyone to see inside. It’s a good security feature if you want glass. For those who want some extra light to work in their garage without sacrificing privacy, I think satin glass is a stylish option to accomplish both goals.”
As the co-owner of Overhead Doors of Lincoln, Cecil Grant also believes that not properly insulating a garage can lead to higher heating bills throughout the winter. In addition, he advises thinking of your garage door like any other machine with moving parts. If it is not periodically oiled and cared for, it will break down sooner than it should.
To prevent a door from breaking down too soon, Cecil encourages every homeowner to ask questions about the opener for their garage door. Is the door opener correct for the door size and weight of the door? If not it could result in the opener wearing out before its time. Cecil services his own garage door and opener twice a year, and his helpful advice is to remember to service your garage door once when you first use your lawnmower in the spring and once when you first clear away snow in the winter. He also recommends listening for tell-tale sounds like popping, creaking, and clicking rollers as a sign that a door requires maintenance. This way, you can ensure a long, healthy life for your garage door.
If you are planning to do some work in your garage or around the house in general, the owner of TooFast Supply, Roger Kontor, said they can cover a range of needs for both do-it-yourself types and professionals. “We do tools for all plumbing and heating and HVAC,” explained Roger, who believes that their work testing and researching the best tools is what sets them apart.
“It’s the knowledge that our people have of the product…There is a tool made for everything. To get you the right tool for the right situation is what we do best.” In addition to specialty equipment and practical hand tools, TooFast also supplies cleaning equipment, installments for doors and windows, supplies for safety, yard work, and most home needs. “A lot of people think a tool is just a drill. It could be a broom. It’s whatever people need to do their job better,” said Roger.
To ensure they are carrying the best products, Roger encourages his staff to try out products before they decide to sell them, to ensure they are reliable. “That way we can stand behind it when we sell it to our customers,” Roger stated.
Considering Your Design Options
For planning the look and feel of your home, a range of options exist for both your exterior and interior. Researching different options you have for color, materials, and style will help you form a mental picture and identify the right professionals to build what you are looking for.
To get a feel for the design options you have available to you, we recommend researching local contractors who do both remodeling and new construction. While not all contractors do new construction, researching their portfolio can both give you a selection of samples that appeal to you, and give you choices for if you choose to remodel your home down the road.
For example, as a remodeling contractor and owner of Jonathan Curtis Design, Jonathan designs and builds both interior and exterior spaces. As he explains, the process of designing an exterior or interior space begins with meeting the client to understand their goals, preparing a budget, designing the final look and presenting drawings to the client, and finally executing the project. Jonathan uses both Instagram and Facebook to share updates and photos on completed remodeling projects, making it an excellent resource to find design options for your own home. Search for the username @jonathancurtisdesign to start collecting ideas for your own home.
When exploring your design options, prepare digital or hard-copy folders to collect ideas that appeal to you. If something specific like the shape, color, or space appeals to you, make a note of that and include it with your collection of images. Here are some businesses we’d recommend looking into for options on designing your home’s exteriors and interiors:
Whether it’s to protect your floor in a space you will work in, or just to make it easier to clean up stains and avoid scratches and nicks, sturdy flooring is a long-term consideration for your new home. EMO Flooring is the place to ask for sturdy flooring options that will resist scratches and stains. As office manager, Jacque Lee, is familiar with the benefits of different types of flooring, and believes that a lot will depend on a family’s lifestyle.
“A benefit of hardwood flooring would be the resale value and the look is potentially better,” Jacque noted. “However, families with kids and pets should probably consider an alternative that is more resistant to damage. Luxury vinyl was introduced around five years ago. It’s 100% waterproof, pet proof, kid proof. Some people are going toward tile. Tile is pretty low maintenance. It never really has to be replaced unless you are updating the home. It doesn’t ding or dent, but the under layer of tile is not completely waterproof.”
Jacque said she would advise not using carpet in a space that might be used as a play room or experience high traffic. “Be careful if you have an open concept area like a living room, great room, or dining room area. Some people are still putting carpet in a great room. Later, they’ll wish they had something more resistant to wear and tear. We still do quite a bit of carpet in bedrooms, stairs, rec rooms, and basement areas, though. On the soft surface side, patterned carpets are becoming pretty popular now, compared to in the past.”
When you are considering the design for your home’s interior spaces, such as kitchens and bathrooms, it is important to remember how much use these areas frequently get. Specializing in custom cabinetry and interiors, Lincoln Cabinet’s showroom is an excellent place to visit to browse beautiful flooring, walls, and kitchen and bathroom options. Lincoln Cabinet’s step-by-step process begins with a consultation in your home to discuss your ideas, goals, and what you want for your home.
Preparing for Your Move and Your Future
The transition from an old home to a new home can be one of the most stressful time periods for new homeowners. While working with Heartland Moving Company, Lee Saltzgaber has seen all too often how lack of preparation can slow down the moving process.
“When you’re moving, you should spend most of your time beforehand packing and deciding which things you actually want to keep. It’s a common problem for people to call us when they are actually not ready to move yet. The more work you do beforehand to pack your belongings, the more you can make the move less stressful and expensive than it has to be. Some customers need help with packing belonging and that is something we’re happy to do for our customers,” said Lee.
Lee’s best advice is to start any packing and sorting work you feel comfortable doing beforehand, to make the moving process quicker and easier down the road. “Start early, a few months before the actual move, and factor in some additional time for us to work if you need help packing certain items. We offer free home estimates to help you plan for a move and your budget, and our vehicles range in size. If you’d like to donate anything you don’t need to the People’s City Mission, we’re happy to haul it away for you, and we offer on-site storage in the event there is a waiting period before you can move into your new home,” offered Lee.
Planning for the way your home will work for kids and pets isn’t the only way you can prepare for the future. Depending on whether your dream house will be a temporary home to raise a family or a long-term place where you plan to grow older, there are many options and investments you can make which will affect your ability to either resell the home or remain there during your senior years.
As owner of TruBlue Total House Care, Ryan Reinke has seen the many ways homes can be adjusted or customized, and some are more practical than others.
“We’ve seen homes where 20 years ago it was a style to have steps from the living room to the dining room. Those quickly become a problem for those with mobility issues due to aging,” explained Ryan. “There are easier things you can do for mobility issues. Taller toilets are an easy thing you can adjust later on. When you’re healthy that’s not a concern. But when your health fails, things change. I’d say access to the home and bathrooms are the two main issues if you’re planning to remain in a home long-term….Anything can be changed in the home. You might want to focus on whether you have the best neighborhood. Location, location, location. It may not be the neighborhood that’s trendy.”
Because some neighborhoods are more at risk for flooding, Ryan recommends asking your builder about the ability for your surrounding area to drain water from torrential rains and floods, investing in a sump pump, and battery backups to keep things running, and budgeting for the long-term when you are choosing options for a new home. “We’ve seen people try and skimp on their windows. Energy efficiency and long-term durability of the home should be paramount. That sounds simplistic, but when you’re budgeting the materials of the home, it’s not as easy,” advised Ryan.
Ryan explained that being realistic about how you will use your home during the planning phases is one of the best ways to use your initial budget wisely.
“Let’s say you have the option of putting in a 20×20 deck. Are you going to use that deck for regular entertaining? In that case, you might want to invest in that deck so you don’t have to replace it in a few years. On the other hand, if you are not planning to use a deck to entertain guests regularly, that money could be used for bathrooms and showers instead. If you are planning to age in your home, plan accordingly with the home’s layout. If you need a low effort entrance shower, you might want to put one in at the beginning. Adding toilets and tubs and sinks to a bathroom is rarely a bad idea for families,” Ryan told us.
Buying a newly constructed dream home can involve some significant costs during the initial construction phase, but different financing options can make it a feasible option in the long run. Asking questions and involving professionals during the planning stages can identify potential problems for the home before they start, and guarantee the most efficient energy and plumbing costs over time.
When saving up for your dream home, don’t forget to seek professional advice to ensure your investment will prepare you for the long run. Remember, home is where we are able to truly be ourselves—build it right and take care of it and it will take care of you!